Business | Investment

Brokerage offers platform for high frequency traders

Though at the moment it trades in forex and bullIon, it will extend to equities and fixed income next year

By Gaurav Ghose, Financial Features Editor

Published: 21:00 December 1, 2013

Image Credit: Courtesy: ADS Securities

Philippe Ganem

Dubai: UAE’s fast diversifying financial services sector has led Abu Dhabi-based brokerage ADS Securities to invest in and develop a new trading platform that would allow it to tap into the high frequency traders segment.

With the HFT (high frequency trading) market growing in the region as more hedge funds and asset managers establish businesses and adopt sophisticated trading strategies, the brokerage saw an opportunity in supporting them by bringing trading business here and also, offering a local solution which supports them, said Philippe Ghnem, managing director and vice chairman of ADS Securities, in an interview with Gulf News.

Traditionally, investment in electronic trading was carried out by banks and large brokerages based in Europe and North America. But with this type of capital drying up during the global financial crisis, there appeared a potential for a Middle East brokerage to develop a trading platform that would offer a fast, efficient and competitive pricing option.

Though designed to manage all asset classes, currently, the proprietary platform called Orex Optim is available to trade foreign exchange and bullion and clients can pick from over 60 different currency pairs. Globally FX trading has now reached $5.3 trillion a day with a growing amount of this trade now being handled through the Middle East.

“Forex and bullion trading is increasing across the Middle East with many financial institutions recognising the benefits of investing in different asset classes which are liquid, making it very easy to enter and exit traders with buyers and sellers always available,” said Ghanem.

“Good pricing,” said Ganem, requires “having the right technology and being able to access market liquidity which is provided by banks and by other financial institutions. Again, the financial strength of companies in the Middle East means we can get good access to liquidity which can then be passed on to clients.”

ADS Securities sees the same global pattern of the US Dollar being the dominant trading currency. However, across the Middle East currencies such as the rupee and the renminbi which also being traded, reflecting the proximity to India and the increasing view that the Chinese currency is likely to become an alternative reserve currency.

The platform will introduce other products such as Options, Forwards and asset classes such as fixed income and equities in 2014.

Business of ADS Securities is equally split between Asia, Middle East, Europe and North America. Clients include banks, asset managers and funds. There is also a growing number of professional clients and experienced individual traders, the company said.